With drought memories fresh, wheat prices rise

Prices for wheat, corn and soybeans rose Friday as traders worried that the devastating drought of the summer could be repeated next year.

Wheat for March delivery rose 5.5 cents to $8.14 a bushel. March corn rose 10.5 cents, or 1.5 percent, to $7.3075 a bushel. January soybeans rose 19.5 cents, or 1.3 percent, to $14.96 a bushel.

Prices for all three agricultural commodities spiked over the summer as crops were damaged by a long drought throughout the Midwest.

On Friday, Alan Knuckman, chief market strategist at Optionshop in Chicago, noted the unusual lack of snow there so far this season. That's troublesome, Knuckman said, because the snow is needed to help replenish the soil's moisture. The dearth of snow could signal a second straight dry season.

"Now, as it looks, the drought problem could be a recurring theme," Knuckman said in an interview. In a research note, he warned of "another potential price shock of possibly epic proportions" in agriculture.

Metals were mixed.

Gold for February delivery was virtually flat, rising 20 cents to $1,697 per ounce. March silver declined slightly, losing 5.6 cents to $32.299 per ounce.

However, metals used most often for industrial purposes rose. They were likely influenced by a report that said manufacturing in China is picking up. Also, U.S. data showed that the nation's factories have rebounded from Superstorm Sandy.

March copper rose 2.3 cents to $3.683 per pound. January platinum inched up $1.70 to $1,614.50 an ounce. March palladium had the biggest jump, rising $10.40, or 1.5 percent, $702.05 an ounce.

The price of oil also rose on the positive report on Chinese manufacturing.

Benchmark crude gained 84 cents to $86.73 on the New York Mercantile Exchange. Brent crude, used to set prices for international varieties of oil, rose $1.23 to $109.14 a barrel on the ICE Futures exchange in London.